Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Piper Sandler East Coast Financial Services Conference 2021
25 slides from Independent Bank's conference presentation, Nov 10, 2021
Slide 1: Piper Sandler East Coast Financial Services Conference
Piper Sandler East Coast Financial Services Conference November 11, 2021 Mark Ruggiero - Chief Financial Officer and Chief Accounting Officer James Rizzo - Commercial Lending Regional Manager
Slide 2: Who We Are
(2) Who We Are • Independent Bank Corp. (Nasdaq: INDB) ◦ Main Banking Sub: Rockland Trust Current INDB Pro Forma INDB* (as reported September 30, 2021) (Dollars in billions) Loans: $8.8 $13.7 Deposits: $12.3 $17.0 Wealth Mgmt: $5.4 $5.4 Market Cap: $2.9 *reflects pending acquisition of Meridian Banc
Slide 3: Key Messages - Core Franchise
(3) Key Messages - Core Franchise • Extensive history of strong financial performance • Expanding footprint in growth markets • Healthy loan and core deposit originations • Diversified fee income business lines • Proven integrator of acquired banks • Demonstrated resiliency in prior crises • Strong
Slide 4: Recent Accomplishments
(4) Recent Accomplishments • Acquisition of Meridian Bancorp, Inc. and EBSB (assets $6.1B) • Strong new business generation despite pandemic • Record growth in business and consumer households • Growing presence in Worcester County • Growth initiatives – online account opening, de novo branches, exp
Slide 5: Expanding Company Footprint
(5) Source: SNL Financial; Deposit/Market Share data as of June 30, 2021 Expanding Company Footprint INDB Market Share* % of INDB Dep. Plymouth County Rank 2021 1 24.6% 36% Norfolk County Rank 2021 4 5.9% 18% Barnstable County (Cape Cod) Rank 2021 4 10.9% 10% Bristol County Rank 2021 5 8.3% 10.5% Mi
Slide 6: Pending Merger: Compelling Combination Creates Significant Shareholder Value
(6) Pending Merger Compelling Combination Creates Significant Shareholder Value Expected Close Date: Mid Nov. '21 Reinforces INDB’s position as the Boston area’s premier community-focused commercial bank Generates strong deal metrics for continued premium valuation multiples of INDB stock Builds sca
Slide 7: Pending Merger: Complementary Businesses with Potential Synergies
(7) Pending Merger Complementary Businesses with Potential Synergies Capabilities and Enhancement Opportunities
Slide 8: Acquisition Strategy: Driving Long Term Growth & Shareholder Value
(8) Acquisition Strategy: Driving Long Term Growth & Shareholder Value Proven Record of Value Add Transactions
Slide 9: Sustaining Business Momentum
(9) Sustaining Business Momentum Business Line • Expand Market Presence/Recruit Seasoned Lenders • Grow Client Base • Expand Specialty Products, e.g. ABL, Floorplan • Optimize Loan Origination Process • Continue to Drive Household Growth • Expand Digital Offerings • Expedite New Account Openings • O
Slide 10: Financial Performance - Strong Fundamentals
(10) $129.8 $184.6 $121.7 $121.9 $4.69 $5.62 $3.66 $3.69 Operating Earnings Operating EPS 2018 2019 2020 YTD21 $0.0 $50.0 $100.0 $150.0 $0 $2 $4 $6 $121.6 $165.2 $121.2 $119.3 $4.40 $5.03 $3.64 $3.61 Net Income Diluted EPS 2018 2019 2020 YTD21 $0.0 $25.0 $50.0 $75.0 $100.0 $125.0 $150.0 $1 $2 $3 $4
Slide 11: Loan Originations
(11) Loan Originations * (Dollars in Millions) $2,676 $2,958 $2,407 Commercial Residential Mortgage Home Equity Business Banking 2019 2020 Q321 Strong Business Volumes Despite Pandemic *Origination amounts presented above do not include loans associated with the Paycheck Protection Program (PPP). As
Slide 12: Loan Portfolio - Commercial Diversification
(12) Total Commercial Real Estate Portfolio Residential - Related 31.8% Commercial Buildings 17.2%Office Buildings 14.2% Industrial Warehouse 9.9% Hotels/Motels 8.0% Strip Malls 6.7% All Other 12.2% Loan Portfolio - Commercial Diversification $4.7B as of 9/30/21 Total C&I Loan Portfolio*** Retail Tr
Slide 13: Low Cost Deposit Base
(13) Low Cost Deposit Base Demand Deposits 37% Money Market 20% Savings/Now 37% CDs 6% Total Deposits $12.3B 3Q 2021 Core Deposits ($ Bil.) $6.6 $7.6 $9.8 $11.3 88.7% 79.9% 89.6% 92.0% Core Deposits Core to Total 2018 2019 2020 3Q21 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 0.0% 20.0% 40.0% 60.0% 80.0% 1
Slide 14: Investment Management: Transformed Into High Growth Business
(14) Investment Management: Transformed Into High Growth Business Longer Term Trends • Successful business model • Growing source of fee revenues • Strong feeder business from Bank AUAs ($ Bil.) $3.6 $4.6 $4.9 $5.4 2018 2019 2020 3Q21 • Expanding investment center locations • Adding experienced prof
Slide 15: Asset Quality: Well Managed
(15) • Disciplined underwriter • Low loss rates • High average FICOs and low average LTVs in consumer book • Proactive identification and resolution of problem loans C&I 42.1% Home Equity 8.2% CRE 25.7% Residential 23.7% Small Business 0.1% Other Consumer 0.2% Asset Quality: Well Managed NPLs ($Mil.
Slide 16: Asset Quality: A Look Back
(16) Asset Quality: A Look Back • Strong credit results through prior financial crisis • Experienced management and loan workout team • Consistent and conservative credit philosophy
Slide 17: Credit Review - Loan Deferrals
(17) Credit Review - Loan Deferrals September 30, 2021 Deferrals by Industry (Dollars in thousands) Highly Impacted Industries Accommodation $ 167,685 Arts, Entertainment, and Recreation 14,964 Total Highly Impacted Industries 182,649 Other Industries Real Estate and Leasing 39,661 Transportation an
Slide 18: Strong Capital Position
(18) Book Value $38.23 $49.69 $51.65 $53.14 12.13% 14.99% 12.89% 12.08% 10.69% 11.28% 9.56% 9.36% Book Value Per Share Equity/Assets % Tier 1 Leverage 2018 2019 2020 3Q21 $0 $10 $20 $30 $40 $50 0% 5% 10% 15% 20% 25% Strong Capital Position Tangible Book Value* $28.57 $34.11 $35.59 $37.24 9.35% 10.80
Slide 19: Near-Term Priorities
(19) Near-Term Priorities • Preparing for EBSB closing and integration • Liquidity/Capital Management • Extending our presence in attractive Worcester market • Commercial loan origination system • Branch optimization including select openings and closings • Maximizing use of Salesforce platform • Co
Slide 20: INDB Investment Merits
(20) INDB Investment Merits • High quality franchise in attractive markets • Consistent, strong financial performance • Strong organic business volumes • Growing brand recognition • Leverageable operating platform • Capitalizing on in-market consolidation opportunities • Diligent stewards of shareho
Slide 21: Appendix A: Non-GAAP Reconciliation of Capital Metrics
(21) Appendix A: Non-GAAP Reconciliation of Capital Metrics The following table reconciles Book Value per share, which is a GAAP based measure to Tangible Book Value per share, which is a non-GAAP based measure. It also reconciles the ratio of Equity to Assets, which is a GAAP based measure, to Tang
Slide 22: Appendix B: Non-GAAP Reconciliation of Earnings Metrics
(22) Appendix B: Non-GAAP Reconciliation of Earnings Metrics The following table reconciles net income and diluted EPS, which are GAAP measures, to operating earnings and diluted EPS on an operating basis, which are Non-GAAP Measures as of the time periods indicated: 2018 2019 2020 YTD21 (Dollars in
Slide 23: Credit Review - Highly Impacted COVID-19 Industries
(23) Credit Review - Highly Impacted COVID-19 Industries Accommodations Balance $ 388,083 Average borrower loan size $ 4,283 % secured by real estate 99.8 % Weighted average loan to value 54.0 % Other information: – The accommodation portfolio consists of 65 properties representing a combination of
Slide 24: Credit Review - Potentially Impacted COVID-19 Industries
(24) Credit Review - Potentially Impacted COVID-19 Industries - Cont'd Other Services (except Public Administration) Balance $ 139,679 Average borrower loan size $ 250 % secured by real estate 51.6 % Weighted average loan to value 48.8 % Other information: – The other services portfolio consists of
Slide 25: Contact Information
(25) NASDAQ Ticker: INDB www.rocklandtrust.com Mark Ruggiero – CFO & Chief Accounting Officer Shareholder Relations: (781) 982-6737 Statements contained in this presentation that are not historical facts are “forward-looking statements” that are subject to risks and uncertainties which could cause a
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